Mr. Speaker, I want to thank my colleague from Souris—Moose Mountain for his thoughtful comments today and for sharing his time with me.
I want to focus my speech on a fundamental truth that is at the heart of this debate, and that is living within one's means. Last year's throne speech highlighted our government's unwavering commitment to controlling spending while investing in Canadian priorities to safeguard our economy. Year after year and budget after budget, we have put in place credible plans to achieve financial sustainability and have set clear targets to bring our deficit down. These actions were crucial as we dealt with the damaging effects of the worldwide recession, one of the worst in more than seven decades. We had to get our fiscal house in order to keep Canadians working and our economy strong.
More than just managing debt, our government is tackling spending. In the same way that Canadian families and businesses have to make tough choices about how to spend their hard-earned money, we are reducing the size and cost of government to ensure taxpayers get good value for the money. We are working hard to make government more efficient and responsive to the needs of Canadians. This is because our overarching goal is to create the conditions for jobs, economic growth and prosperity for all Canadians. Our impressive track record in advancing this agenda has made Canadians the envy of the world.
Since we introduced the economic action plan to respond to the global recession, Canada has recovered more than all of the output and more than all of the jobs lost during the recession. Real GDP is significantly above pre-recession levels: the best performance in the G7. This success has not gone unnoticed. In fact, in Bloomberg's recent 2013 ranking of best countries for doing business, Canada jumped from sixth to second place, challenging Hong Kong for top position. This recognition reinforces the benefit of being good fiscal stewards. Reducing spending, lowering taxes and paying down debt are enabling us to seize new economic opportunities as we promote free trade and innovation. These are the keys to job creation, economic growth and prosperity.
I lay out these facts to underline that these same truths apply just as much to Canada Post as it faces unprecedented challenges. In the same way that our government had to make tough decisions and take decisive action to respond to the global economic downturn in 2008, Canada Post must also tighten its belt and develop new strategies for success as it copes with the detrimental impacts of the digital economy on its traditional business.
The pace of postal decline has been accelerating here in Canada and in other developed countries for a number of years. However, it accelerated after the economic slowdown struck in 2008. Companies cut their mailing costs as part of their overall cost reductions, and many opted to shift more billing, statements and marketing to an online solution. At the same time, individual consumers began moving en masse from traditional to digital communications. In fact, Canadians are now more likely to send and receive a text message or email than to write, post or wait several days for delivery. This is especially true with the under 35 crowd. They are a population of people who are starting to move into their first homes and who have led to a growth in the number of new addresses that Canada Post must serve.
Not surprisingly, rapidly declining mail volumes, combined with the need to deliver mail to more households, is causing serious financial challenges at the corporation.As other speakers have noted, mail volumes per address dropped by nearly 25% between 2008 and 2012, and a further 6% decline is forecast in 2013. We do not need a crystal ball to see where this trend is going. A 2013 report prepared by the Conference Board of Canada into the corporation's future projects states that unless major changes are made, annual operating deficits will reach nearly $1 billion by 2020. Quite simply, the corporation's current business model no longer allows it to earn sufficient revenues to offset its costs. Without changes, the future viability of the postal service is clearly in question.
Canada Post is not the only postal service in the world facing these challenges, nor is it the only one to come to a similar conclusion. The U.S. Postal Service, for example, has reduced service hours and the number of employees to address these financial pressures, while the U.K.'s postal service has been privatized, which has led to a significant increase in stamp prices.
The digital economy is not going away. The corporation cannot turn back the clock and change the fact that fewer Canadians are using the mail system and visiting post offices. Canada Post has no option but to find new ways of doing business in order to keep its operations profitable.
Like the people living in the millions of households that it delivers mail to or like any level of government that is accountable to taxpayers, Canada Post must manage its business prudently. Indeed, it has a mandate to operate on a self-sustaining financial basis. Its financial responsibility has been a legislated obligation since 1981.
The services currently provided by Canada Post are clearly no longer affordable. The corporation needs to spend within its means in the same way that individuals do as they manage their family budgets. More than that, change is essential at Canada Post if it is to keep pace with the choices Canadians are already making about the way they prefer to communicate.
To meet this goal, the corporation is focusing on the best ways to reduce its expenditures. Since delivery accounts for about 40% of Canada Post's operating costs, it is the most obvious place to start.
Door-to-door delivery is by far the most expensive mode of delivery. It costs between two and three times the cost to deliver to community mailboxes. Let us compare $283 annually for home delivery versus $108 for community mailboxes. They are also cheaper than delivery to a rural mailbox, which rings in at $179 a year.
To be clear, we are talking about changes affecting only home delivery. Businesses with large volumes of mail or located in business zones will generally retain their door-to-door delivery. However, the remaining one-third of Canadians who still have door-to-door service—a minority of people in this country, I would add—will gradually shift over the next five years to community mailboxes instead.
Community mailboxes provide secure mail storage in a convenient place close to home to receive parcels and packets. The people using them will join the 10 million other Canadians who have been receiving their mail this way for decades. Let us remember that Canada Post introduced community boxes back in 1981, so Canada Post has been successfully delivering mail and packages this way for a very long time.
Since labour is another significant component of Canada Post's rising costs, plans to return the corporation to self-sustainability have to address labour costs, including the sustainability of Canada Post's pension plan. The corporation expects to reduce its workforce by between 6,000 and 8,000 positions by 2019. This will be achieved largely through attrition. Like most workplaces populated by baby boomers, a lot will leave the workforce in a few years' time. Nearly 15,000 employees are expected to retire or leave the company over the next five years.
Another way that Canada Post is addressing its revenue shortfalls is by increasing the basic stamp price to $1. As others have explained today, there are ways of lowering this cost by buying stamps in larger quantities, which will help to keep mail costs lower for small businesses.
By taking these necessary and progressive steps, Canada Post will be able to remain productive and competitive into the future. Most importantly, these steps will enable Canada Post to become financially self-sufficient again, as it was for the 16 years up until 2011.
While Canada Post is a crown corporation that operates at arm's length from the government and is solely responsible for its day-to-day operations, all Canadians have a stake in Canada Post's long-term welfare. Canada Post has put forward a plan that it is confident will return the corporation to financial self-sustainability by 2019. It is important that this plan be implemented as quickly as possible and that these results be achieved.
Canada Post must fulfill its mandate of operating on a self-sustaining financial basis in order to protect taxpayers while modernizing its business and aligning postal services with the choices of Canadians.